G/O Mayhem + B2B Niche Holding Industries Accountable
|Nov 1||Public post|| 2|
Happy Friday! I appreciate everyone sending me their opinions earlier this week about newsrooms being the greatest asset. If you ever have something to say, feel free to hit reply. I’m testing out a different format for this post where I pull a few things going on and offer my thoughts. So, without further ado, let’s jump right in!
Vanity Fair wrote a story on the launch of The Recount, the new video venture led by veteran journalists, John Heilemann and John Battelle. Heilemann summed up the project as the following:
There wasn’t really an answer to the question of, on your phone, where do you go to see what’s happening in politics right now? People do a good job summarizing in text what’s [currently] happening in politics, but there’s not really an answer to that question [with video]. At some point in the not-too-distant future, someone was going to build the thing that was to this age, for politics, what ESPN was to sports in the age of cable.
I downloaded the app to check it out…
The truth is, the product is actually nice. The quality of the video is pretty solid. Right now, it looks like they produce 5-6 videos per day that are each under 5-minutes in length. In approximately 30-minutes, I can get an update on what’s going on politically in the United States.
The team is also comprised of a bunch of media heavy-weights from Disney, BuzzFeed, Viacom, Vice and Mic, not to mention a newsroom of roughly 20 people. All in all, it’s a video news company with $10 million in funding.
The business model, according to them, is primarily sponsorship at this point. They have a few launch partners and run short pre-roll in front of the clips. Apparently there is also an events business being planned, though they’re still looking for someone to lead this part of the company.
The longer-term strategy is to supplement the daily remix model with an original content component. That’s what Recount viewers will eventually have to pay for, and the company also plans to develop stuff it can potentially sell to other platforms—imagine, say, a six-part series for Hulu or Netflix or whoever, at 30 minutes per episode, shorter clips that could be repurposed for Recount subscribers. Recount recently struck a partnership with David Chang’s Majordomo Media to produce short-form videos as well as events, focused on the intersection of food and political culture. (Think Anthony Bourdain interviewing Barack Obama in Hanoi.)
Based on all of the information presented to me today, I think the investors have taken $10 million and lit it on fire like so many other investors in consumer media have in the past.
It’s not because the quality of the product is bad. I think it’s higher quality than NowThis, which does short-form video and distributes it across various social channels. I actually found myself enjoying it when I downloaded it on Tuesday, learning quite a bit about what was going on that day.
It’s also not because there’s already too much political content out there, though I do sort of question the need for more. Their argument that this is for people that want video that isn’t cable TV is acceptable.
The reason I think this is $10 million lit on fire is because their target demographic does not open news apps. According to Battelle:
There are over 150 million people who actively seek out news. We are focusing, initially, on professionals in the information economy who are really busy and just want to get dinner-party smart on what’s going on in politics. The key audience we’re going after is very, very large and very underserved.
Recount is right that young people are looking for new formats to consume content. And it’s true that there might be 150 million people who seek out news, but none of them are seeking it out in a new app they have to download.
On those 20 young people’s phones, Instagram was the primary app: Every one of the 20 had it and spent the most time on it daily. News apps, by comparison, received much less usage. Apple News is pre-installed on iPhones, which helps account for its relative prominence here — but “no news app (with the exception of Reddit) was within the top 25 apps used by respondents…For two of the four individuals who had the BBC news app on their phone during the two-week tracking period; the app represented less than 1 percent of usage time for both.
Although there are likely some people that will use the app, the vast majority are unlikely to stay loyal to it. The report found that Instagram is the favorite for people, but for heavy news users, it’s actually Twitter and Reddit that are the go-to platforms. People can curate what they see that way.
This doesn’t help Recount because it’s unable to generate revenue from the video plays there. We’ve seen so many media companies try to do social distribution as a business and it’s failed miserably.
It’s possible that I am coming to this conclusion too soon. The report does say that news media needs to make apps easier to use so that it’s more enjoyable to consume news. More interactive storytelling, which this is, can certainly help. And I’ll be honest, I find it difficult to bet against Battelle since he has had a lot of successes over the years.
Unfortunately, a product that requires me to download an app is just not something that I think will work. I will find similar news in Twitter.
Sound on Ads & The Death of Deadspin
Being on the business side of a media company—and more specifically, the ad part—I’ve had my fair share of debates about ads on the site with editorial.
We’ve debated banner ads, in-content units, the chum boxes at the end, and sponsored content. Sometimes I was right. Sometimes I was wrong (yes, I advocated for chum boxes at one time).
I can tell you there’s one thing I’ve never considered even once: sound on, auto-play video ads.
Sound on, auto-play ads are never acceptable. I don’t care if you’re CNN, ESPN, or whatever other name you want to drop—sound on, auto-play ads are never acceptable.
G/O Media didn’t get the memo. In an article on The Wall Street Journal, the author summed up the problem:
The Farmers deal, which began last month and is worth $1 million, required G/O Media to deliver nearly 43.5 million ad impressions through September 2020, according to internal G/O Media emails reviewed by The Wall Street Journal.
The publisher’s media and ad operations teams believed it was unlikely G/O Media could deliver that many, according to the emails.
After failing to hit ad impression targets within the first few weeks of the campaign, G/O Media decided to start playing videos with the sound on as soon as pages loaded, according to people familiar with the matter. That included stand-alone video ads for Farmers inside article pages as well as preroll ads before editorial videos.
We’ve all been there. You really want the deal to be successful, but you realize the numbers just aren’t there. But the quickest way to piss off your audience is to run these types of ads.
According to the Journal’s article:
Auto-playing video ads with sound are especially disruptive because they surprise web users and often compel them to quickly close the window, according to the Coalition for Better Ads, an industry group formed to improve the online experience.
If you’re trying to deliver a specific number of impressions, an auto-playing video with sound is the quickest way to get a user to close the page. If the advertiser is expecting a certain completion rate on the video ad, it’s unlikely the publisher is getting the results they want—and the advertiser definitely isn’t.
I probably wouldn’t give this story space in the newsletter if it was only about auto-playing, sound on videos. It gets worse. The management team of G/O Media, which has not garnered much trust from the editorial team, mandated that Deadspin reporters “stick to sports.”
I’ll be honest… I’m not a Deadspin reader. It’s just not my cup of tea. However, the audience that they do have loves them. They love Deadspin because of how bizarre and humorous the content is.
To come in and mandate that coverage change—without offering a specific reason—is just a dumb move.
I think this tweet sums up what’s going on here:
Why did the management team buy G/O if they knew this was what they were getting? The value is in the audience, which comes from the writers, right? If that’s the case, why screw it up?
But G/O management sure did screw it up. They fired Barry Petchesky, deputy editor, and over the next 24 hours, nearly the entire team left. G/O then issued some bizarre statement that at first glance sounds like a super valid reason.
Until you look at the public analytics on Deadspin and realize it’s one big lie. Read the entire thread from Joshua.
Max Tani@maxwelltaniYikes G/O Media just released a statement criticizing the traffic on non-sports Deadspin stories: "While amusing, our readers haven’t actually come to Deadspin for stories like 'Classic Rock, Ranked,' or 'You’re Goddamn Right It’s Layering Season,' or 'It’s OK to Logoff.' " https://t.co/docWlyca3a
It just doesn’t make sense. You’re getting more traffic from the non-sports stories and you have a team of writers that are beloved by their audience.
This is a classic case of the management team trying to do things because they feel like they should rather than getting the hell out of the way.
Maybe there’s a good reason. Perhaps they were getting serious push back from advertisers that the content was not considered brand safe—What Did We Get Stuck In Our Rectums Last Year? is one possible offender—so there was a need to refocus the site.
I’m going to guess that simply wasn’t true, though. If they were able to close Farmers Insurance on a $1 million deal, brand safety wasn’t a problem.
But let’s say that it was the case. Have a conversation. Don’t issue mandates, especially if you’ve not exactly had a great relationship with the team thus far.
Alas, Deadspin now has very little content being published. Oh, and Farmers decided that it wasn’t going to advertise after all. A stupid tactic turned into a missed opportunity for any revenue.
This is likely to have collateral damage too. Are other advertisers going to want to risk being included in negative stories about media failures because of G/O management’s incompetence? If I’m an advertiser, I put a pause on any media deals. This is only going to get worse.
B2B Media Does Hold Its Industry Accountable
Changing pace from consumer, I want to dive into my favorite topic: B2B media.
Stories like this one in The Washington Post about how it was a trade publication that broke the Keating Five scandal always make me happy to read.
The Keating Five story was actually broken by the National Thrift News, a small mortgage industry newspaper, not one of the major national newspapers such as The Washington Post, the New York Times or the Wall Street Journal.
Nearly a year and a half before the collapse of Lincoln S&L, the National Thrift News had spelled out the story of Keating’s political pressure campaign. National Thrift News editor Stan Strachan had gotten wind of the meeting between the Keating Five and regulators in the summer of 1987 and eventually obtained a transcript.
But while leading media outlets hesitated, the National Thrift News had the guts to publish the Keating Five story just two months after Keating sued freelance journalist Michael Binstein for libel. For its coverage of the savings and loan crisis, the National Thrift News won a George Polk Award in 1987.
It’s just a fun story to read about. A publication that, for so many people would be considered boring, revealed a huge scandal. That’s why journalists are so important and seeing it in action, even 32 years later, is always exciting.
But it’s more than that.
It’s a reminder that industries need these independent publishers to report on what’s happening, especially when it’s not good. But there’s a reputation about B2B media that this doesn’t actually happen.
Its courageous reporting reveals a misconception about trade journalism. For years, trade publications have been criticized as being captives of the industries they cover. A closer look into this little-noticed corner of journalism, however, tells a more intriguing story.
Every industry deserves to have a publisher, not to act as an evangelist, but to hold the industry accountable. It’s true, though, that many of the more traditional trade publications have become captive of the industries they cover. Fortunately, there are many newer, digital-first ones that have not.
I look at Aging Media, Skift, Front Office Sports, Industry Dive, Housing Wire, and so many others. Their journalists report on the industry—the good and the bad. They hold their industries accountable.
To do this type of work as an operator, though, requires a specific understanding that it’s not going to be easy. You will have advertisers calling up, demanding that stories get taken down or they’re going to “pull their ads.” I guarantee many of the CEOs of the above firms have dealt with that. Weaker executives—I won’t refer you to the previous section of this newsletter—might allow that. But when you’re running a true B2B investigative news organization, you have to be willing to see money walk away.
You can no longer say that you hold the industry accountable when you cave to the industry. When that happens, the audience will no longer trust you and that is the true death knell.
I keep coming back to this, but there is so much opportunity in B2B. Traditional trade publications have left huge voids in massive industries just waiting to be covered. If they’re not going to do it, entrepreneurial journalists and operators can team up and build legitimate news organizations that treat their journalists fairly, cover industries, and build sustainable businesses.
The topics may sound boring, but the deeper you go into an industry, the more fascinating it becomes.
Find your niche. Partner with a great journalist. And then report the hell out of whatever that industry is. You’ll be able to build a business.
Thanks for reading everyone! This was a bit on the long side, but sometimes there’s just a lot to say. If you have thoughts, please hit reply. I make sure to reply to everyone. If you have colleagues that would enjoy this, please hit the share button below. Finally, if you’re new here, be sure to hit subscribe. Have a great Friday and weekend and I’ll see you next week! Take care.